The functions of the nonciliated bronchiolar epithelial cell (Clara cell) of the lungs are not known. Numerous morphological investigations in many species have led to the hypothesis that the Clara cell is secretory although the nature of those secretions and their function in the airways are not known. The objectives of this research are to eludicate the secretory nature of the Clara cell, identify and characterize those secretions and determine their extracellular functions. We have developed a model system for the study of Clara cell functions and metabolism using cells isolated from the lungs of rabbits. Cells were dispersed from lung tissue using a pancreatic protease introduced via the trachea. These dispersed cells contained approximately 8% Clara cells. The Clara cells were enriched to about 40% by centrifugation on a continuous density Percoll gradient. The Clara cells were then subjected to centrifugal elutriation, resulting in further purification (Clara cells 75-85% pure). These cells were added to collagen I coated culture dishes and incubated overnight in Ham's F12 medium. The attached cells consisted of at least 90% Clara cells. The isolated Clara cells contained abundant endoplasmic reticula and osmiophilic cytoplasmic granules typical of Clara cells in vivo. These features were maintained when the cells were incubated for 24 hours. Incubation of the isolated cells with 35S-Methionine for 4 hours resulted in the radiolabeling of many intracellular proteins some of which were released into the incubation medium. The major radiolabeled protein present in the medium had a molecular weight of about 10,000 daltons as determined by sodium dodecyl sulphate-polyacrylamide gel electrophoresis under reducing conditions. Clara cells could be maintained in in vitro culture for periods up to 2 weeks in Ham's F12 medium supplemented with insulin, transfering, EGF, hydrocortisone, bovine hypothalamus extract and antibiotics. These studies indicate that the isolated Clara cells may be an appropriate model for the study of Clara cell function and metabolism.